TRANSFORMATIONAL OIL AND GAS PRODUCTION …€¦ · analysis* (has indicated that reservoir quality is “between good and excellent”. *commissioned by AAOG Congo after drilling

TRANSFORMATIONAL OIL AND GAS PRODUCTION OPPORTUNITIES IN AFRICA

AUGUST 2020

DISCLAIMERThis document (the “Presentation”) has been prepared by and is the sole responsibility of Zenith energy Ltd. (“Zenith”). All information used in the Presentation has been compiled from publicly available sources that are believed to be reliable. However, because of possible human or mechanical error by Zenith, its affiliates or its sources, Zenith cannot guarantee the accuracy, validity, timeliness or completeness of any information provided for in this Presentation.

No guarantee, warranty or representation, express or implied, can be given by Zenith as to the accuracy, adequacy or completeness of the information contained in this Presentation and they are not responsible for any errors or omissions or results obtained from use of such information. Neither Zenith, nor any affiliates, officers, directors or employees accept any liability or responsibility in respect of the information which is subject to change without notice and may only be correct at the stated date of their issue, unless in case of gross negligence, fraud or wilful misconduct Zenith expressly disclaims any warranties of merchantability or fitness for a particular purpose. In no event will Zenith, its affiliates or any such parties be liable to you for any direct, special, indirect, consequential, incidental damages or any other damages of any kind even if Zenith have been advised of the possibility thereof.

The Presentation has been prepared purely for information purposes, and nothing in this report should be construed as an offer, or the solicitation of an offer, to buy or sell any security, product, service or investment. The Presentation reflects the objective views of Zenith and does not constitute investment advice.

The information provided in this document is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject Zenith or its affiliates to any registration requirement within such jurisdiction or country.

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The Presentation includes statements that are, or may be deemed to be, “forward-looking statements”. These forward looking statements can be identified by the use of forward-looking terminology, including the terms “believes”, “envisages”, “estimates”, “anticipates”, “projects”, “expects”, “intends”, “may”, “will”, “could”, “seeks” or “should” or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include matters that are not historical facts and speak only as of the date of the Presentation. They appear in a number of places throughout the Presentation and include statements regarding Zenith and the directors of Zenith’s current intentions, beliefs or expectations concerning, amongst other things, investment strategy, financing strategy, performance, results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which Zenith operates.

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This notice shall be governed and construed in accordance with English law.

2020 ZENITH ENERGY INVESTOR PRESENTATION

SLIDE 01

Development strategy defined by:

Acquiring and developing assets with untapped reserves and existing production

Maximising revenue by implementing low-cost oil production models

Ownership and operatorship of keyequipment - minimises the relianceon external oilfield service companies

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METRICS

Near-term Operational Activity

TLP-103C : Preparation and execution of drilling activities in well TLP-103C of the Tilapia oilfield, Republic of the Congo, targeting the potentially highly productive Mengo and Djeno formations

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Recent HighlightsZenith is engaged in an countercyclical acquisition campaign of highly prospective oil production and development assets in Africa

Submission of comprehensive commercial and technical offer to the Ministry of Hydrocarbons of the Republic of the Congo for the award of a new 25-year licence for the Tilapia oilfield (to be named “Tilapia II”)

Acquisition from KUFPEC, a subsidiary of the State of Kuwait’s national oil company, for a 22.5% interest in Sidi El Kilani, an onshore oil production asset in Tunisia.

West Africa: Highly advanced negotiations with a national oil authority for: 1. an oil production asset, (last producing at a rate in excess of 1,000 BOPD) 2: Producing second asset, (operated by an international oil major), currently producing 600 BOPD.

Participation, as technical and financial partner to a Nigerian registered energy company, in the ongoing 2020 Marginal Fields Bid Round organised by the Nigerian Department of Petroleum Resources.

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A DUAL LISTED INTERNATIONAL OIL AND GAS PRODUCTION COMPANY FOCUSSED ON TRANSFORMATIONAL OPPORTUNITIES IN AFRICA

KEY SHAREHOLDERS:Board of Directors, Mirabaud & Cie (Europe) SA,Premier Miton Investors, Mr. Dean Clark

MARKET CAP CIRCA (APPROX)

STOCK TICKER

(LSE: ZEN / OSE: ZENA-ME)

SHARES IN ISSUE (APPROX)

£8M

942M


SLIDE 02

TRANSFORMATIONAL REVENUE GENERATING OIL PRODUCTION OPPORTUNITIES IN AFRICA

REPUBLIC OF THE CONGOPRODUCTION POTENTIAL FOLLOWING DRILLING UP TO 5,000 BOPD

REPUBLIC OF THE CONGO

TUNISIA

TUNISIACURRENTLY PRODUCING AT A RATE OF APPROXIMATELY 650 BOPD

2,000 - 3,000 BOPD

PRODUCTION POTENTIAL OF APPROX

BRAZZAVILLE

TUNIS

LOUBOMO

SIDI EL-KILANI

POINTE-NOIRE

TILAPIA


*The Notes are governed by Austrian law and are not convertible into Zenith equity.

*The issue of the Notes is aligned with the Company’s strategy of diversifying its financing towards non-equity dilutive funding to support its potentially transformational asset acquisition activities in Africa.SLIDE

03

EUR 25 MILLION EMTN PROGRAMME

Zenith has launched a EUR 25,000,000 multi-currency Euro Medium Term Notes (EMTN) Programme.

•To date, Zenith has issued the following, multi-currency Euro Medium Term Notes at part value: (*the “Notes”)

EURO 1,000,000 bearing an interest of 10.125% per year the “EUR-Notes”

ISIN: XS2108546735

USD 1,000,000 bearing an interest of 10.375% per year the “USD-Notes”

ISIN: XS2108546651

GBP 1,000,000 bearing an interest of 10.5% per year the “GBP-Notes”

ISIN: XS2108546578

CHF 1,000,000 bearing an interest of 10.00% per year the “CHF-Notes”

ISIN: XS2108546818

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The EMTNs are admitted to trading on the Third Market (MTF) of the Vienna Stock Exchange and will be due on January 27, 2024.

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BRAZZAVILLELOUBOMO

POINTE-NOIRE

TILAPIASLIDE 04

ACQUISITION HIGHLIGHTS REPUBLIC OF THE CONGO, TILAPIA

Geographic position

• Located in the Lower Republic of the Congo Basin, West African Atlantic Margin, which extends from Gabon down to Angola, a prolific hydrocarbon region

• Individual wells in this region have recorded production rates of up to 5,000 barrels of oil per day.

• Acreage is situated 1.8km offshore (drilled from onshore negating the necessity of offshore drilling equipment)

• First production in 2008.• Close to nearby infrastructure

(Oil storage /processing facilities - 45-minute drive from Point Noire and 17km from nearest refinery.)

Upside potential

• Successful recent drilling undertaken during 2018 and 2019 identified multiple potential productive reservoirs across a number of formations including the regionally proven Mengo and Djeno reservoirs

• Recent expert wireline log analysis* (has indicated that reservoir quality is “between good and excellent”.

*commissioned by AAOG Congo after drilling activities in the Djeno

UP TO 5,00030 350,000

PRODUCTION POTENTIAL FOLLOWING DRILLING

CURRENT PRODUCTION(BOPD)

BOPD BOPD BOPD

NATIONAL PRODUCTION APPROX

Highly strategic acquisition

• Zenith has acquired 100% of AAOG Congo, the former operator of the Tilapia oilfield with a 56% interest.

• Remaining 44 percent was held by the national oil company, Société Nationale des Pétroles du Congo (“SNPC”).


PRODUCTION POTENTIAL FOLLOWING DRILLING (BOPD)

CURRENT PRODUCTION(BOPD)

NATIONAL PRODUCTION APPROX (BOPD)


SLIDE 05

ACQUISITION HIGHLIGHTS REPUBLIC OF THE CONGO, TILAPIA

BRAZZAVILLELOUBOMO

POINTE-NOIRE

TILAPIA

UP TO 5,00030 350,000BOPD BOPD BOPD

SNPC owes AAOG Congo approximately US$5.3 million. Zenith has met with SNPC and expects to obtain the full repayment of the aforementioned amount.

The seller of AAOG Congo has also novated 100% of the intercompany loans with AAOG Congo to Zenith as of the date of Completion, equivalent to approximately £12.5 million.

Zenith is commissioning a new Competent Person’s Report in compliance with Canadian securities laws, specifically the COGE Handbook and National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities.

Zenith has submitted an offer to the Ministry of Hydrocarbons for the award of a new 25-year licence in relation to the Tilapia oilfield, to be named “Tilapia II” and established a new local subsidiary, Zenith Energy Congo SA, at the request of the Ministry of Hydrocarbons.

Currently planning to begin drilling activities in well TLP-103C shortly after obtaining a new 25-year licence for Tilapia.

Major operators including Eni and Total operate in neighbouring fields producing from the Djeno horizon with production rates of between 1,000 to 5,000 BOPD from individual wells.

AAOG Congo’s licence to operate the Tilapia oilfield (“Tilapia I”) expired on July 18, 2020, as publicly announced by Zenith Energy and previously announced by AAOG plc.


SLIDE 06

0M

1000M

2000M

3000M

4000M

SW NETLP-103C

800000 801000 802000 803000 804000 805000 806000 807000 808000 809000 810000

TLP-103C-ST

(Aptian)LOEME

(Barremian)R2

(Barremian)MENGO

(Neocomian)DJENO

(Neocomian)

TILAPIA LICENCE

VANDJI

Ocean Land

TLP-103C-ST

NETLP-103C TLP-103C-ST

TILAPIA LICENCE

Ocean Land

TLP-103C-ST

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=

TLP-103C:ALREADY DRILLED

TLP-103C SIDETRACK:TO BE DRILLED

= DRILLING RIG

= OIL POOL

TLP-103C SIDETRACK

POTENTIALLY TRANSFORMATIONAL PRODUCTION FROM THE MENGO AND DJENO FORMATIONS

As publicly announced, Zenith intends to contract a suitable and fully inspected drilling rig to sidetrack TLP- 103C and thereby achieve potentially transformational production from the Mengo and Djeno formations once a new 25-year licence is obtained in respect of the Tilapia oilfield.

An independent review ofthe petrophysical analyses of drilling activities in well TLP-103C concluded that reservoir quality is between good and excellent, supporting the commercial decision to seek potentially transformational production from the Djeno formation.


REPUBLIC OF THE CONGO, TILAPIA

TUNISIA

SLIDE 07

ACQUISITION HIGHLIGHTS

TUNISIA

650

TOTAL CURRENT GROSS ANNUAL PRODUCTION APPROX

US$15M

TOTAL CURRENT PRODUCTION REVENUE APPROX

Sidi El-Kilani

Tunis

35,000

NATIONAL PRODUCTION APPROX

BOPD BOPD

Deal details • Signing of a conditional sale

and purchase agreement with KUFPEC, a subsidiary of the State of Kuwait’s national oil company, for the acquisition of a working interest in the North Kairouan permit and the Sidi El Kilani Concession, which contains the Sidi El Kilani oilfield

• Zenith’s partners will include the national oil company of Tunisia, Entreprise Tunisienne d’Activités Pétrolières (ETAP) with a 55% interest and CNPC, China National Petroleum Corporation with a 22.5 % interest.

• Currently producing at a rate of approximately 650 BOPD

Approvals Completion subject to:

• Approval from the national oil company of Tunisia, Entreprise Tunisienne d’Activités Pétrolières (ETAP).

On June 7, 2020, Zenith announced that it had paid US$250,000 to KUFPEC and confirmed that it expects the production revenue generated since the date of signing of the SPA to be sufficient to fully satisfy the second and final Consideration payment to be made by October 2020.


SLIDE 08


ROME

Genoa

A D R I A T I CS E A

M E D I T E R R A N E A N S E A

ITALY - CASH GENERATING ENERGY PRODUCTION

Balanced energy production portfolio providing cashflow with stable low-cost natural gas production

Moderate investment expected to achieve significant increase in natural gas production

Highly profitable electricity is produced at the Torrente Cigno concession using low-grade sour gas production

Italy’s economy is heavily dependent on oil and gas

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368.96 KM2

16.3BCF

255 MBBLS

63 900 MWh US$15M

WORKING INTERESTS IN

OF ITALIAN NATURAL GAS PRODUCTION CONCESSIONS

NATURAL GAS 2P RESERVES

CONDENSATE 2P RESERVES

OPERATEDCONCESSIONS

NON-OPERATED CONCESSIONS

2 EXPLORATION PERMITS

2 EXPLORATION PERMITS AWAITING APPROVAL

MONTHLY ELECTRICITY PRODUCTION:

Italy has a long and successful history of natural gas production and exploration across its territory

The Company announced on July 31, 2020, that it had received a legally binding loan facility for an amount of approximately EUR 300,000 from an Italian governmental entity. Under the terms of the loan, all funds to be disbursed are to be utilised for the purpose of the establishment of commercial activities in Africa, specifically in the Republic of Congo and the broader West Africa region.

The Company plans to file an application for a second loan facility of this kind, designed to assist Italian commercial enterprises in the current challenging financial climate, for the purpose of making infrastructural investments in its Italian natural gas, condensate and electricity production operations.

SOUTHERN GAS CORRIDOR - TAPPRODUCTION CONCESSIONS

ITALIAN NATIONAL PIPELINE INFRASTRUCTURE

A low-risk jurisdiction with a strong EU regulatory framework

NPV DISCOUNTED AT 10%

SLIDE 09

OWNERSHIP OF DRILLING EQUIPMENT

1 WORKOVER RIG

(375HP)

1 DRILLING RIG (1 ,200HP) capable of drilling to a depth of approx 5,000 metres(depending on well design)

Zenith strongly believes in the benefits of owning and operating the key equipment required to develop its asset portfolio. For the following reasons:

1. Cost control2. Operational independence3. Direct oversight on execution


SLIDE 10

SUMMARY INVESTMENT CASE

Uniquely positioned in the current low oil price environment to pursue an aggressive, countercyclical acquisition campaign in Africa targeting low-risk oil production assets generating significant productionrevenue even at US$30 oil.

Highly experienced operational team with proven track-record of success

Highly knowledgeable and well connected Advisory Committee recently created to support its business development activities in West Africa

MANAGEMENT ALIGNED WITH SHAREHOLDERS - THE BOARD OF DIRECTORS AND MANAGEMENT COLLECTIVELY HOLD APPROXIMATELY 15 PERCENT OF ZENITH’S SHARE CAPITAL.

Ready availability of drilling equipment and technical personal across all acquisition opportunities. (Company owns key drilling equipment including a drilling rig (1,200hp) and a workover rig (375hp))

Stringent due diligence in place for all new assets being acquired

TUNISIA


Tunis

Brazzaville

DEVELOPMENT OF AFRICA PORTFOLIO EXPECTED TO TRANSFORM THE COMPANY INTO A MID-CAP PRODUCING AN AVERAGE OF 3,000- 5,000 BOPD.

2,000 - 3,000 BOPD

PRODUCTION POTENTIAL OF APPROX

1 4

2 3 5

Ideally positioned to complete a number of highly prospective acquisition opportunities at advantageous terms across Africa in the current low oil price environment


SLIDE 11

TEAM

Andrea CattaneoChief Executive Officer & President (UK & Africa based)

Proven deal maker and government advisor with specific expertise in FSU and African countries. He has more than 30 years of experience in sovereign loans, capital markets and oil trading between Western and emerging countries. Andrea is one of Zenith’s founders and largest shareholders.

Luca BenedettoChief Financial Officer (UK based)

Luca Benedetto trained in Italy as a registered accountant with further education in IFRS accounting and consolidation at IPSOA Milan. He has more than twenty-five years of accounting, auditing and financial administration experience.

Executive Directors & Senior Management

Luigi Regis MilanoExecutive Director,Managing Director of Italian Operations (Italy based)

Luigi has more than 40 years of experience in the petroleum industry during which he has been the executive director of a large trading company specialised in oil refining, processing and trading. Luigi has held a significant interest in an Italian oil refinery since 2000. Luigi is one of Zenith’s founders and currently serves as Managing Director of it’s Italian subsidiary.

Dr. José Ramón López PortilloChairman and Non-executive Director, (UK based)

Dr. Dario SoderoNon-executive Director, (Canada based)

Erik Sture Larre Jr Non-executive Director(Norway based)

Sergey Borovskiy Non-executive Director(China based)

Former Mexican Ambassador to Food and Agriculture Organisation (United Nations) and Minister in Mexican Federal Government. Leading researcher on the energy security of Mexico. He is also the Former Chairman of the FAO council. Holds a doctorate from the University of Oxford in political science and international relations.

Experienced energy industry executive with strong geological, technical and exploration expertise in North America, North Africa and the Middle East. Holds a doctorate in Geological Sciences from the University of Turin, Italy.

Norwegian national with strong expertise in large-scale real estate development projects, banking and the oil & gas industry. Erik served as Deputy Chairman of SpareBank 1 Nord-Norge and as Chairman of its Audit Committee.

Sergey has over 25 years of experience in business management in China and Hong Kong, he is fluent in Russian, English and Mandarin and holds a degree in economics CEO and Chairman of various oil & gas consulting, engineering, trading, chemical, seismic research and exploration services companies based in China and Hong Kong.


SLIDE 08

CONTACT Zenith Energy Ltd.Andrea CattaneoChief Executive OfficerE-mail: [email protected]: +1 (587) 315 9031

Allenby Capital Limited - Financial Adviser & BrokerNick Harriss, Nick AthanasTel: + 44 (0) 203 328 5656

Documents

TRANSFORMATIONAL OIL AND GAS PRODUCTION …€¦ · analysis* (has indicated that reservoir quality is “between good and excellent”. *commissioned by AAOG Congo after drilling